April has been dubbed “Financial Literacy Month” for an unfortunate reason: too many Americans are financially illiterate.
Last year, a six-question money quiz saw just 3 percent of over two-thousand respondents get a passing grade.
If most Americans can’t answer basic financial questions, imagine how little they understand about the college planning landscape. To muddle things even further, higher education lacks price transparency and the sticker price of college can be extremely misleading. In fact, the 2019 NACUBO Tuition Discounting Study found that private, nonprofit colleges and universities surveyed reported an estimated 52.6% average institutional tuition discount rate for first-time, full-time students. As schools get more expensive and student loan debt increases, families will be increasingly looking to you for guidance on how to find the right college at a price their family can afford.
Here are five ways you can support college-bound families and help them prepare for one of life’s biggest investments:
1. Help Parents Define Their College Funding Plan
Families need financial game plans, especially when it comes to college.
An advisor’s role often revolves around listening, and in this case, all you need to do is start the conversation.
One of the best ways to help your clients is by having them articulate their college funding plan. Let the parents tell you what schools are on their radar and how they plan to pay for it.
Throw them some softball questions like:
- Are you looking at private colleges? Any public universities?
- How much do you want to pay for these schools?
- Do you intend to pay for all of it or a set percentage?
- Are you expecting for your kids to rely on student loans?
While providing a pathway to discuss your solutions, these questions will show the parents that they don’t have all the answers. And it will affirm that they need a more detailed approach to college planning.
Start these conversations as early as possible with your clients – even if college is over a decade away for their kids.
2. Teach Them About EFCs (And Help Lower Their Scores)
Once the parents can clearly see the financial mountain before them, you can give them the tools they need to climb it.
Start by talking about EFCs. For starters, many people don’t even know what an EFC is, much less understand the ways to lower them and maximize financial aid.
This is a prime opportunity to educate your clients.
Whether you’re paying down debt to reduce parent assets, rolling custodial accounts into 529s, or maximizing savings in 401ks and IRAs, employing strategies to lower EFC scores will give parents a sense of ownership in helping their kids attend the right school.
3. Make Sure They Complete The FAFSA (With Your Help!)
This may sound obvious, but it’s important to point out. Some families completely overlook the FAFSA because they don’t think they’ll qualify for aid.
Or, if they do complete the FAFSA, they misfile and lose opportunities to qualify for both need and merit-based aid.
Here are some of the FAFSA form mistakes that can inadvertently lead to reduced aid:
- Including retirement accounts as investments
- Divorced parents listing both of their assets (rather than just those of the custodial parent)
- Errors in reporting household size
- 529s reported as the student’s asset (rather than the parent’s)
Help your clients by ensuring they complete the FAFSA, submit it well ahead of the deadline, and do so only after they’ve spoken with your team to ensure no details are out of place.
4. Give Them The College Money Report™
It might sound too good to be true, but it is possible to educate, attract, and retain clients all at once.
With the College Money Report™, you can provide college-bound families with a customized breakdown of their top three colleges and send it right to their email.
Here’s how it works: after you install the software on your website, the College Money Report™ takes your prospective clients’ information and generates a report with an aerial view of their top schools, available grants/scholarships, and expected out-of-pocket costs.
And while your prospective clients are enhancing their college expertise, your website collects their contact information for you to start nurturing the relationship.
It’s a win-win. Click here to learn more.
5. Encourage High Standardized Testing Scores + Extracurriculars
Even though the latest buzzword is “test optional”, higher standardized testing scores frequently result in higher merit-based scholarships.
As an advisor, you can incentivize parents and their college-bound kids to continue taking and improving their SAT and ACT scores.
Here’s how two schools increase scholarship money by even marginally better testing numbers:
- The University of Mississippi guarantees a minimum scholarship of $5,000/year for a 1300 ACT score. However, if the student gets a 1330 — a mere 30 point increase — that minimum jumps to $7,500.
- With a minimum 1250 Score, The University of Oregon guarantees $6,000/year to Oregon residents and $10,000/year to out-of-state students.
Beyond the correlation between scholarships and high testing scores, college admissions committees also place a premium on extracurricular activities. Things like notable community service and leadership positions can make students even more attractive and eligible for merit-based aid.
Getting Started With College Aid Pro™
College planning can be overwhelming to parents and advisors alike.
While the higher education landscape is constantly changing, however, the solution to college planning remains the same.
Welcome to College Aid Pro™ — the state-of-the-art software that helps you become an expert in the field and streamline the college planning experience in a profitable way.
In a matter of minutes, you can give parents comprehensive information and strategies that would otherwise take days to provide.
Want to check out a free demo? Click here to give it a try.